DEPUTY COMMISSIONER OF SALES TAX (LAW),BOARD OF REVENUE (TA vs MOTOR INDUSTRIES CO., ERNAKULAM

The Supreme Court held that under Rule 9(a) of the Kerala General Sales Tax Rules, 1963, a 'service discount' can be considered a trade discount if it is supported by proper accounting entries. The Court dismissed the appeal regarding the 'service discount' but allowed the deduction for 'sales returns' under Rule 9(b)(i), clarifying that such deductions must be made from the turnover of the assessment year in which the goods were sold. The ruling emphasized that discounts aimed at promoting trade qualify for deduction as trade discounts, not service charges.